This Decree covers the identification, establishment, management and use of Production Forest Areas (PFA) and the key principles for monitoring the implementation of sustainable forest management throughout Lao PDR. This Decree further covers the duties and functions of relevant sectors, local authorities and villagers in participatory management of PFAs (Art. 1).

The objectives of the Decree are to enhance and implement the provisions of the Forestry Law covering forest areas intended to produce wood and forest products to support national socio-economic development and improve the livelihoods of local communities through a system of sustainable Production Forest management (Art. 2). It aims to establish the principles and procedures to establish PFAs throughout Lao PDR under a sustainable management system, and to create a framework for sustainable management of PFAs based on the participation of villagers in forest management planning, management and receipt of revenues (Art. 2).

Production Forest is defined as forest and forest land that has been categorised to regularly provide for the requirements of national socio-economic development and the daily livelihood needs of the pluri-ethnic people in terms of wood and forest products without substantial harm to the environment (Art. 3, 1.1). PFA is defined as a legally established area of foresr meeting all criteria in the definition of production forests, consisting of the different forest categories in Article 16 of the Forestry Law eligible for activities under a system of sustainable forest management with particpation of villagers (Art. 3, 1.2). The Decree goes on to define 'Production Forest Management Area (FMA)', 'Forest Management Sub-Unit (FMSU)', and 'Village Forestry Organisations (VFO)'.